It’s been a bad week for Arte Moreno and his plans for Angel Stadium development, as the state attorney general is alleging Anaheim Mayor Harry Sidhu spoke of soliciting campaign contributions from the team in exchange for the city’s support of the project.
The charges are just the latest in state opposition to the terms of the proposal Angel Stadium development, as proposed by Angels owner Arte Moreno and city officials. Moreno and his investment group are seeking to buy the 20-acre Angel Stadium site and an additional 133 acres comprising 12,500 parking spaces for games and events, and City National Grove of Anaheim, a 1,700-seat theater. The total cost: $150 million in cash and $170 million in community benefits, including affordable housing. The goal was a mixed-use development a la The Battery. Moreno would have the power to decide whether to build a new ballpark at the site or renovate Angel Stadium.
There are plenty of conditions to this plan, of course, and this being California, there have already been legal challenges to the sale, including allegations that the city and Moreno did not confirm to state open-government laws in negotiating the deal. The city won that lawsuit in April.
But two big challenges to the deal remain. The challenges are related, so we’ll discuss them in sequence.
When the land sale to the Angels development group was first announced, it was immediately criticized for a lack of affordable housing mandated by state law. The California Surplus Land Act requires municipalities selling parcels as surplus must first offer it to qualified affordable-housing developers, who will then be required to set aside a percentage of any new housing units for affordable housing. We’ve seen the act in play in San Diego, where the state directed city officials to rebid the sale of 48 acres for redevelopment of the Pechanga Arena area. The result in San Diego: A second round of bids from big developers that added affordable-housing partners.
The city’s argument: the land was not surplus, and in any case affordable housing was part of the Angel Stadium development plan. After the city decline to address the issue, the state sued. But in order to expedite the process, the city proposed spending $96 million on Anaheim affordable housing to settle the case via stipulated judgment–accompanied by an 80 percent reduction in Angel Stadium affordable housing. This is the amount the state conceivably could fine the city for not meeting the Surplus Land Act requirements. The offer was accepted by the state.
Hold on, said the state agency in charge of actually enforcing the Surplus Land Act. The California Department of Housing and Community Development (HCD) came out against the deal and urged Anaheim officials to reject it. You don’t often see state agencies clashing like this, but HCD’s decision seem to be a little more personal than rational in pushing more for punishment than resolution:
“As we have stated repeatedly, the City of Anaheim and SRB’s transaction violated the Surplus Land Act. We extracted the maximum penalty and additional commitments to affordable housing for this violation,” said Megan Kirkeby, HCD deputy director of housing policy development, in a statement late Friday.
“The revised DDA is evidence the city and SRB don’t take our enforcement and affordable housing seriously. HCD will exercise everything in our power to hold them accountable.
“It is difficult to see how the DDA aligns with the stipulated judgment. We encourage the city council to reject the revised DDA.”
Now comes the bombshell. To an outsider, it would appear the state and the city had some legitimate differences of opinion over the status of the sale of the land and ballpark to the Angels. Indeed, the city and the Angels certainly were cognizant of the dangers of proceeding in court with their proposal, and other state officials saw the possibility of losing the lawsuit by accepting the proposal. Settling lawsuits on these kinds of deals is the norm in America’s courtrooms.
The state now says that the city had a different rationale in pursuing a settlement: that Mayor Sidhu wanted to close the land sale in order to solicit a million-dollar campaign contribution from the Angels. Sidhu has been under FBI surveillance for public corruption. Because of the investigation, the state is asking the land sale put on hold until resolution one way or another. From the Los Angeles Times:
That, according to an FBI affidavit filed Monday in Orange County Superior Court, was because Sidhu wanted to see the deal through to solicit a campaign contribution from the Angels.
“We’ll push them at least [to] have a million dollars,” Sidhu said, unaware the FBI had arranged for the conversation to be recorded. “You know, for [an Angels official] to say ‘no’ is bad.”
The Angels official was not identified.
On Monday, the state attorney general asked a court to put the $320 million sale on hold. The court filing explained why: a detailed FBI affidavit showed Sidhu is under investigation for public corruption, and the attorney general said he does not yet know whether the facts uncovered in the investigation could make the sale illegal.
It should be noted that no one associated with the Angels has been accused as participating in any corruption. And it would also be noted that Sidhu has not actually been accused as soliciting in any campaign contributions from the Angels, merely that he mused on its worth.
Given the circumstances, it’s likely the land sale will be put on hold while a grand jury meets and the investigation continues. What may be more problematic for both sides isn’t something as obvious as a payoff, but something more subtle: the accusation that Sidhu shared confidential information with the Angels ownership during negotiations for the land sale, information the team could use to tailor their strategies for city approval. Given that we’re heading more into Law and Order territory than HGTV Love It or List It territory when it comes to Angel Stadium renovations, expect this story to be drawn out for months.
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